Why has Capitalism failed to produce optimal value everywhere?

[Fake Boris]

It's true that when a bank's loan gets repaid, it could decide not to make another loan and just hold onto its reserves and have a higher reserve to deposit ratio. But that's not how banks make money. They would only do this if they don't have anything to invest in. That's a Keynesian situation which has nothing to do with whether fractional reserve banking exists or not.

And thus aggregate debt increases, because interest on existing loans has to be paid with money that comes from fresh loans.

[Fake Boris]

You can tell Fake Boris is an expert on money because he has so much of it.

**** off.

[giblets]

And thus aggregate debt increases, because interest on existing loans has to be paid with money that comes from fresh loans.

The money for paying interest comes from producing goods and services. There isn't a 1:1 ratio of income and the money supply.

[Fake Boris]

So your point doesn't have anything tangible to back it up.

Just stick to growing GMOs.

[Fake Boris]

The money for paying interest comes from producing goods and services. There isn't a 1:1 ratio of income and the money supply.

No. You can pay interest with any financial gain, whether it be real or nominal.

[giblets]

No. You can pay interest with any financial gain, whether it be real or nominal.

That's true, you can pay off interest with capital gains. I'm not sure how that refutes what I said...? That's just another way someone can pay off interest without borrowing even more money.

[Aeson]

Just stick to growing GMOs.

I'm sure you wish I would, so you wouldn't get smacked around so badly in economic debates.

Sadly, I can't grow any GMOs here. I wish I could get some BT eggplant here, or even BT sprays (less effective, but still better than what we have to spray as an alternative). I haven't been able to find any.

[Fake Boris]

That's true, you can pay off interest with capital gains. I'm not sure how that refutes what I said...? That's just another way someone can pay off interest without borrowing even more money.

Who's talking about a single individual?

[giblets]

Who's talking about a single individual?

We can talk about an individual debtor and use that to make inferences about debtors in general.